A 95% mortgage is a residential mortgage where you borrow 95% of the property’s value and provide the remaining 5% as your deposit.

For first time buyers in Beverley, this can make homeownership possible sooner, particularly if saving a larger deposit has been the main barrier.

Instead of needing 10% or 15% upfront, you only need 5% of the purchase price, provided you meet the lender’s affordability and credit criteria.

How Does a 95% Mortgage Work?

The “95%” refers to the loan-to-value ratio, often shortened to LTV.

This measures how much you are borrowing compared to the property’s value.

If you purchase a home in Beverley for £200,000 with a 95% mortgage, your deposit would be £10,000, and the lender would provide the remaining £190,000.

Because the lender is taking on a higher level of risk by lending a larger percentage of the property’s value, interest rates are typically higher than mortgages with bigger deposits.

Your income, employment status, and credit history will still be assessed in full, just as they would be with any other mortgage application.

Who Can Get a 95% Mortgage?

Although 95% mortgages are commonly associated with first time buyers, they are not limited to them.

Home movers with smaller equity positions may also consider this option.

Lenders will look closely at your income stability, monthly commitments, and credit history.

When borrowing at 95%, even minor credit issues can have a greater impact, as there is less margin for risk from the lender’s perspective.

In Beverley, property values differ between developments, town centre homes, and surrounding residential areas.

Understanding your borrowing capacity before making an offer is particularly important.

Are 95% Mortgages More Expensive?

Interest rates for 95% mortgages are generally higher than those available at 90% or 85% loan to value.

The difference in monthly payments will depend on the lender and the product chosen, though the overall cost of borrowing can be higher over time.

As you reduce your mortgage balance or if your property increases in value, your loan-to-value ratio improves. This can allow you to remortgage onto a lower rate in the future.

We always look at both the immediate affordability and how your position may improve over the next few years.

Is a 5% Deposit Enough?

A 5% deposit meets the minimum requirement for a 95% mortgage, though you will also need to factor in additional costs such as legal fees, surveys, and moving expenses.

In some cases, increasing your deposit slightly, even by a few percentage points, may provide access to more competitive mortgage products.

It is worth weighing up whether buying sooner with 5% or waiting to save more better suits your plans.

That decision should be based on your personal circumstances rather than simply aiming for the lowest possible deposit.

Date Last Edited: February 26, 2026